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Does I-300 need replacing?By Cheryl Stubbendieck Nebraska Farm Bureau vice president/public relations The legislature's Agriculture Committee is currently studying if and how Nebraska should replace its prohibition against corporate farming. The U.S. Supreme Court declined in April to hear appeals of lower court ruling that found the prohibition, Initiative 300, unconstitutional. The Ag Committee's interim study could lead to legislative proposals for the 2008 legislature. I-300 prohibited non-family corporations from owning farmland and engaging in farming and ranching. To qualify as a family farm corporation, I-300 required a family member to either live on the farm or ranch or provide daily labor and management to the farming or ranching operation. The courts found I-300 violated the commerce clause of the U.S. Constitution by essentially requiring people to live on or near the farming operation, excluding most non-Nebraskans from participating in farm and ranch operations. The measure also was found to violate the Americans with Disabilities Act. Nebraska voters added I-300 to the state constitution in 1982. A lot has changed in agriculture in the ensuring 25 years. People who oppose passing a new law argue that today's ag economy requires farmers to be nimble, flexible and ready to respond to the market. Corporate farming bans may tie their hands, given how markets operate today. In addition, laws and regulations implemented since 1982 address some of the same concerns. Unlike the early '80s, most Nebraska counties now have zoning, and the state has stringent environmental regulations for livestock facilities. Also on the plus side, without corporate restrictions, business and estate planning would be much easier, and the transfer of farms to off-farm heirs would be simplified. Supporters of having some kind of prohibition believe the underlying philosophy of I-300 should be retained to the extent possible to protect family farms from unfair corporate competition. They argue that restrictions are needed to protect Nebraska's natural resources and the social fabric of our rural communities. Other people are somewhere in between; they support the underlying philosophy of I-300, but they want more flexibility for unrelated farmers, such as being able to join together to form a limited liability entity to establish a feedlot. Or they'd like an older farmer to be able to work through a limited liability entity to transfer a farm to an unrelated younger farmer. Many of our neighboring states have corporate farming restrictions in their state law. Most allow farming corporations, but they require some family involvement or the provision of daily labor and/or management. Some states allow corporate involvement in certain agriculture sectors, such as pork or cattle, but not others. However, it's questionable whether these laws would be found to be constitutional if challenged in court. J. David Aiken, University of Nebraska agricultural and water law specialist, has spelled out some conditions that must be met for a corporate farming prohibition to be constitutional. Restrictions could not be placed on out-of-state persons or business entities, nor could restrictions be placed on Nebraska businesses that involve anyone from out of state. Nebraska could place restrictions on corporations that are 100 percent Nebraska-owned, but in order to avoid the law, a corporation could simply include minor out-of-state interests. Although much has changed in a quarter century, whether to restrict corporate farming remains controversial and the related issues are still complex. One thing does seem clear, however. Given the rate of change in agriculture, Nebraska would be wise to place any such restriction in state statute, rather than the much-harder-to-change state constitution. Statutes can be changed much more readily when warranted. Date: 8/22/07
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